A-REIT's performance fee structure could stunt future growth

Possibly limited to between 2-8% growth.

"Although Ascendas REIT (A-REIT) continues to own one of the best industry REIT portfolios in Singapore, its ability to grow further is hindered by the structure of its performance fees," according to CIMB in a note after A-REIT released its 2QFY14 results, which were pretty much in line with the research firm's expectations.

"According to our estimate, DPU is poised to grow yoy by c.4% in FY14 and c.12% in FY15. However, AREIT’s growth will be limited to 2% and 8% in the respective years if performance fees kicks in (0.1% of AUM if DPU grows by more than 2.5% and 0.2% of AUM if growth exceeds 5%)," CIMB added.

This led CIMB to also downgrade A-REIT from Outperform to Neutral with a slightly lower target price as the research firm factored the performance fees into its estimates.

Reaching the people who run Asia's businesses is harder than it used to be.

Inboxes are crowded. Attention is short. The executives you most want to reach — the founders, CFOs, and operators who actually move budgets — are the hardest to find through the usual channels. If you're building a company, a category, or a reputation, you already know this.

We've spent twenty years building the room they read. Singapore Business Review is where senior decision makers in Singapore and across Southeast Asia come for business coverage they can't get elsewhere — in print, online, and in person at the summits and roundtables we host across seven markets.

If you have something these readers should know about — a point of view worth publishing, a product worth their attention, an event worth their time — we'd like to hear what you're trying to do.

Book a meeting

| Or download the media kit (PDF)

240,000 senior readers quarterly in print Top 1,700 Singapore companies reached

7 markets across Southeast Asia